Milwaukee-based Miller Brewing Co. and Coors Brewing Co., located just outside Denver, will combine their U.S. operations, presenting new competition to St. Louis-based Anheuser-Busch Cos., the country's top beer producer. Parent companies SABMiller Plc and Molson Coors Brewing Co. signed a letter of intent last week to merge. ,”Two of the biggest names in the brewing industry are combining forces to take on the "King of Beers."
Milwaukee-based Miller Brewing Co. and Coors Brewing Co., located just outside Denver, will combine their U.S. operations, presenting new competition to St. Louis-based Anheuser-Busch Cos., the country's top beer producer. Parent companies SABMiller Plc and Molson Coors Brewing Co. signed a letter of intent last week to merge.
As the second-largest brewer in the country, the new company would have 29 percent of the American beer market. It would challenge the makers of Anheuser-Busch, which has 48 percent of the market, according to Beer Marketer's Insights, a trade publication.
The deal, which would save the companies $500 million a year, is expected to be approved by the middle of 2008, said Pete Marino, Miller spokesman.
Miller has six breweries nationwide and Coors has two. The companies said no breweries would be closed. The merger will result in greater operating and scale efficiencies-Miller breweries will make Coors products and vice versa, Marino said.
Miller has 800 administration jobs at its company headquarters at 4000 W. State St. It also has 900 brewing jobs in Milwaukee. More job cuts would be expected on the administrative side than the brewing side as a result of the merger, Marino said.
While the new company could increase production at Miller's Milwaukee brewery, many local civic and business leaders want the new company's headquarters here. The Milwaukee 7, a regional economic development group, hopes to have discussions with MillerCoors early next year, said its Pat O'Brien, the group's executive director.
"The opportunity is that the headquartered operations here could get larger and bring more people in," O'Brien said. "The brewery itself could get larger and produce more products. The risk is that the headquarters goes somewhere else and the brewery goes somewhere else."
In the spirit of "Miller Time," Mayor Tom Barrett said during a press conference last week that it's "Milwaukee's time" to thank Miller for its involvement in the community and encourage MillerCoors to locate its headquarters here.
"I am prepared to go wherever it's necessary to make the case that the city of Milwaukee remains open for business and the ideal location for any new corporate headquarters for Miller should be the city of Milwaukee," Barrett said. "Given our rich history here, it makes sense to have the capital of this brewing industry remain in the city of Milwaukee.
"When people think beer, they think Milwaukee."
Marino said while it's too early to say where the new company headquarters will be, but a decision will be made during the next several months.
For the average beer drinker, the merger won't have much of an immediate impact because of the high market share of Miller products in Milwaukee, said Mike Gallagher, executive vice president of Miller Brands, the Miller distributor for Milwaukee County.
Two Marquette bars, Caffrey's, 717 N. 16th St., and Murphy's, 1613 W. Wells St., get all their Miller products from Miller Brands, said bar owner Mike Vitucci. His bars currently do not serve Coors, though Vitucci said he now expects to have it as a result of the merger.
The merger could result in consolidation among beer distributors. But Gallagher said right now, it's business as usual at Miller Brands, which doesn't distribute Coors.
Changes in beer prices aren't expected to be drastic, Vitucci said.
"There's only three big companies out there and I think they all kind of work pricing on their own – one follows each other," Vitucci said. "I see prices going up, but it's not going to be significant or that much of an effect. There's just too many beers out there to choose from."
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